India Unveils ₹12,980 Crore Maritime Insurance Pool to Shield Trade from Global Risks

In a significant move to safeguard its trade lifelines amid rising global uncertainty, the Union Cabinet chaired by Narendra Modi has approved the creation of the Bharat Maritime Insurance Pool (BMI) , backed by a sovereign guarantee of ₹12,980 crore . The initiative aims to ensure uninterrupted and affordable insurance coverage for Indian shipping, particularly as geopolitical tensions and market volatility disrupt global maritime operations.

The decision comes at a time when international shipping routes are increasingly exposed to risks ranging from conflicts and sanctions to environmental hazards. These uncertainties have driven up insurance premiums and raised concerns about the availability of coverage, especially for vessels transiting high-risk regions. India’s heavy reliance on foreign insurers, particularly global Protection and Indemnity (P&I) clubs, has further amplified vulnerabilities, as coverage can be withdrawn or restricted under geopolitical pressure.

At its core, the BMI Pool represents a shift toward collective risk-sharing . An insurance pool is a mechanism where multiple insurers combine their financial and underwriting capacities to cover large and unpredictable risks that would be difficult for a single company to bear. Under the proposed structure, Indian insurers will jointly underwrite maritime risks, sharing liabilities and claims through a common pool. This ensures that even in volatile conditions, coverage remains accessible and stable.

The BMI Pool will provide comprehensive protection across key maritime risk categories, including Hull and Machinery, Cargo, Protection and Indemnity (P&I), and War risks . It will cover Indian-flagged vessels, ships controlled by Indian entities, and those carrying cargo to and from Indian ports even when navigating through conflict-prone or unstable maritime corridors. With a combined underwriting capacity of around ₹950 crore, the pool will issue policies through participating insurers, supported by the government’s financial guarantee.

Beyond immediate risk mitigation, the initiative carries broader strategic significance. By reducing dependence on foreign insurance providers, the government seeks to enhance sovereign control over critical trade infrastructure and build resilience against sanctions or external disruptions. The pool is also expected to foster the development of domestic expertise in marine underwriting, claims management, and maritime legal frameworks—areas traditionally dominated by global players.

A dedicated governing body will oversee the formation and operations of the BMI Pool, ensuring regulatory alignment, transparency, and efficiency. Officials believe the sovereign guarantee will instill confidence among insurers and stakeholders, enabling the pool to function as a reliable backstop for India’s maritime sector.

The move aligns with India’s broader push for self-reliance and economic security , particularly in sectors that underpin global trade. As nearly 90 percent of India’s trade by volume is carried by sea, ensuring uninterrupted insurance coverage is critical not just for shipping companies but for the stability of the wider economy.

By institutionalizing a domestic insurance mechanism, India is positioning itself to better navigate an increasingly uncertain global order—where control over risk, as much as control over routes, defines the strength of maritime nations.